Author: Darren Terminator
Recently, Jiemian News interviewed Professor Zhao Dingxin on the occasion of the third edition of his book "Lectures on Social and Political Movements" (the second edition was truly an excellent book). During the interview, Professor Zhao mentioned that the recent budget-cutting measures at the University of Chicago were because, "It is said that the university administration apparently took investment advice from some Nobel laureates, lost over six billion dollars trading cryptocurrency, so it can be said that the reduction in humanities at the University of Chicago has little to do with Trump's policies."
So, did the University of Chicago really lose over six billion dollars trading cryptocurrency?
Coincidentally, the University of Chicago's updated Q&A from December 2025 [1] mentioned the cryptocurrency trading issue. According to the official statement: "Contrary to claims in a certain news report, the University of Chicago has not suffered losses on cryptocurrency investments. The University's investments in cryptocurrency are relatively modest but have more than doubled over the past five years. The University's investment goals are to provide a stable source of income to support the University's programs long-term and secure its future."
Is the University of Chicago Provost necessarily telling the truth?
Hard to say. But intuitively, the total endowment of the University of Chicago has been around $10 billion in recent years (peaking at about $11.6 billion in FY2021; approximately $10.9 billion in FY2025 [2]). Unless the University of Chicago was truly疯狂 enough to invest at least 60% of its endowment in cryptocurrency (which显然 violates various regulations), or misappropriated a large amount of operational funds for crypto trading and lost it all, it should not have lost as much as six billion dollars.
So how much was actually lost? Or did they actually make a fortune as the Q&A suggests?
The Stanford University student newspaper [3], the Financial Times [4], and Investopedia [5] reported on this matter last year. According to the Stanford paper, their four sources indicated: "The University of Chicago lost tens of millions of dollars on cryptocurrency investments around 2021."
What do the University of Chicago's financial reports [6] say?
Unfortunately, the financial reports do not directly tell us exactly how much was lost on cryptocurrency trading. However, in the FY2022 financial report, the University of Chicago disclosed its cryptocurrency investments (fair market value): As of the end of June 2021, it was approximately $64 million, and as of the end of June 2022, it was approximately $45 million (a difference of about $19 million). In subsequent financial reports, perhaps because they made a fortune or lost a fortune, the University of Chicago changed its reporting method and no longer discloses its cryptocurrency investments. However, according to the 2025 Q&A statement, the University of Chicago is still investing in cryptocurrency relatively cautiously.
It is worth noting that the 2022 financial report showed that as of the end of June that year, the total investment loss of the University of Chicago's endowment fund was surprisingly high, at about $1.5 billion. The 2023 financial report then showed that the University's investments only incurred a small loss. In the following two years, the University of Chicago returned to profitability.
However, we do not know how much of these losses and gains came from cryptocurrency trading. The Stanford University student paper provided a less reliable clue: "[The University of Chicago's] target asset allocation shows that the ideal allocation for private debt and 'absolute return' investments (which include alternative assets such as cryptocurrency) has decreased from 25.5% in 2020 to 20% in 2022,暗示 a significant withdrawal (or downturn) in high-risk alternative assets."
However, the Stanford paper also made an interesting observation: "Between 2013 and 2023, the University of Chicago endowment's annualized return was only 7.48%, while the stock market's annualized return during the same period was 12.8%, and the average for Ivy League schools was 10.8%. If the University of Chicago had simply followed market performance, its endowment would now be $6.5 billion larger. And this (dream) fund would be more than enough to pay off the university's entire debt. Of course, universities cannot simply replicate market indices, as they must hedge during economic downturns to maintain financial stability. But even if the University of Chicago had only reached the average of its approximate peer group, the Ivy League, its endowment would still be $3.69 billion larger today. This would be enough to cover the university's current budget deficit for the next 15 years."
However, besides cryptocurrency trading and investment losses, what other reasons can explain the University of Chicago's budget cuts?
Common explanations, besides Trump being a scoundrel, often emphasize the University of Chicago's own strategic mistakes: taking on debt and leverage, massive infrastructure construction, and aggressive expansion. [7][8] As of the end of June 2025, the University of Chicago's debt was approximately $9.2 billion [9], about 90% of its endowment. Although the financing cost of this debt is relatively low, unlike on the other side of the ocean, the interest the university needs to pay this fiscal year still amounts to over $200 million.
Such high debt did not come out of nowhere. Since the new century, in order to enhance its reputation and enrollment, and compete with various established prestigious schools, the University of Chicago has spent huge sums on new laboratories, libraries, dormitories, technology, etc., and this expansion has been largely supported by heavy borrowing. However, new infrastructure brings持续 operating costs, and the school did not plan how to sustain them long-term.
The University of Chicago student newspaper [10] quoted Professor Clifford Ando as saying that any parent wanting to send their child to the University of Chicago needs to think about whether the tuition they painstakingly pay is for their child's education or for paying off the school's debt. The疯狂 expansion and the ensuing debt problem are clearly the responsibility of the school's management for being impulsive and overly ambitious. More ironically, the base salary of the president increased by 285% between 2006 and 2022. Now encountering some economic problems, the management is passing the difficulties on to students and general faculty: even in years of selling assets, layoffs, and暂停招生, executive compensation continues to rise.
So what should the University of Chicago do next?
Besides continuing to cut costs, it must, of course, increase revenue. Obviously, a common trick for American universities to make more money is to enroll more undergraduates. The University of Chicago is also going to do this, though the理由 will certainly be stated冠冕堂皇.
[1]https://provost.uchicago.edu/actions-budget
[2]In this article, the budget, endowment, and debt of the University of Chicago are consolidated calculations for the University proper, the Medical Center, and the Marine Biological Laboratory. Common news reports (especially the University of Chicago's own publicity materials) usually consolidate the endowment but only calculate the debt for the University proper.
[3]https://stanfordreview.org/uchicago-lost-money-on-crypto-then-froze-research-when-federal-funding-was-cut/
[4]https://www.ft.com/content/4501240f-58b7-4433-9a3f-77eff18d0898?utm_source=chatgpt.com
[5]https://www.msn.com/en-us/money/careersandeducation/university-s-investment-losses-spark-outrage-resulting-in-drastic-program-cuts/ar-AA1Nxhgx
[6]https://intranet.uchicago.edu/en/tools-and-resources/financial-resources/accounting-and-financial-reporting/financial-statements
[7]https://www.wsj.com/us-news/education/colleges-face-a-financial-reckoning-the-university-of-chicago-is-exhibit-a-8918b2b0
[8]https://www.ft.com/barrier/corporate/d5c7c0f4-abf1-4469-8dca-87ff01cbebf6
[9]The debt of the University proper is approximately $6 billion. Perhaps this is the source of Professor Zhao's $6 billion figure.
[10]https://chicagomaroon.com/40486/news/uchicago-professor-sounds-alarm-over-troubling-university-finances/
